Smart cards are in widespread use. A smart card resembles an ordinary plastic credit card, but having added features which include (1) a high-capacity memory, together with (2) an interface, which allows external equipment to communicate with that memory. In addition, some, or all, of the data stored within a smart card is stored in encrypted form, and some smart cards may be able to perform encryption and decryption of that data.
Smart cards are used by both individuals and industries. An industry may use smart cards, for example, in a manufacturing process. Each product undergoing manufacture, such as an automobile, is equipped with a smart card, which stores data indicating all manufacturing steps previously accomplished, thereby indicating the present state of completion of the product.
Individual persons commonly use smart cards in place of credit cards. For example, a bank provides equipment, such as an Automated Teller Machine (ATM), with which the smart card communicates. When a person who maintains an account with the bank wishes to obtain funds, the person presents a smart card to the ATM. The ATM loads data into the smart card which indicates a monetary amount, and deducts that amount from the account. The person then utilizes the smart card to make purchases of merchandise and services.
When the purchases are made, specialized equipment located at the site of the purchase (1) reads the monetary amount stored within the smart card, (2) determines whether the monetary amount will cover the purchases, and, if so, (3) deducts the amount of the purchase from the stored monetary amount.
As smart cards come into wider usage, more cards will enter circulation. Consequently, on average, the number of cards carried by each person is expected to increase.
It is not necessarily convenient for people to carry large numbers of smart cards.